The U.S. Small Business Administration issued a one-page application form designed to make it easier for applicants to complete the process of applying to forgive Paycheck Protection Program loans, as well as newly updated and revised forms that meet the requirements of the most recent stimulus legislation.
The COVID-19 relief package that Congress approved last month renewed the PPP with $284 billion of funding for small businesses seeking forgiveness loans to help them deal with the financial fallout of the coronavirus epidemic. The legislation required that the SBA provide simplified forms within the first 24 hours of the signing into law. This was to facilitate the application for forgiveness. Additionally, it included conditions to encourage community banks to lend more, especially to minority-owned businesses who were unable to obtain loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and said that the Small Business Administration fulfilled the requirement to issue the one-page PPP form loan forgiveness within 24 hours of the date of the enactment of the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released updated forms.”
Forgiveness terms in the first draw of PPP loans
Student Loan Forgiveness For Former Brenau University – For borrowers who are eligible, First Draw PPP loans are qualified for loan forgiveness. This is when the loan payment is made within an 8 to 24 week period.
- It’s the same for pay and benefits for employees.
- The loan funds are used on payroll and other eligible expenses; and
- Minimum 60% of proceeds go to payroll costs
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans made to eligible borrowers qualify for total loan forgiveness if they do so during the 8– to 24-week duration following loan payment:
- The First Draw PPP loan requires that the employee and compensation levels be maintained in an identical manner.
- The loan proceeds are used on payroll costs as well as other eligible expenses and
- At least 60% of funds go to expenses for payroll
- How do I request loan forgiveness and when
The borrower is eligible for forgiveness after all loan proceeds to which the borrower has applied for forgiveness have been utilized. Borrowers can request forgiveness at any time until the date at which the loan matures. If they do not file for forgiveness within 10 months of the end of the period covered, then PPP loans are no longer deferred, and the borrower will be required to make monthly payments to their PPP lender.